Early beginning[edit]
Dragonair House
Dragonair House, the head office at Hong Kong International Airport
The airline was established in Hong Kong on 24 May 1985 on the initiative of Kuang-Piu Chao, the airline's present honorary chairman, as a subsidiary of Hong Kong Macau International Investment Co. It started operations in July 1985 with a Boeing 737-200 service from Kai Tak International Airport to Kota Kinabalu International Airport in Malaysia, after receiving an Air Operator's Certificate (AOC) from the Hong Kong Government. The airline commenced services to Phuket, Thailand, as well as six secondary cities in mainland China on regular charter basis in 1986. In 1987, the airline became the first Hong Kong-based airline to join as an active member of the International Air Transport Association (IATA).[4]
Dragonair was the first local competitor for Hong Kong's largest airline, Cathay Pacific, in forty years; and since the airline's inception, Cathay Pacific fought vigorously to block the airline's flight-slot applications. In January 1987, the airline announced its expansion by the order of two long-range McDonnell Douglas MD-11 aircraft. However, after a heated hearing before Hong Kong's Air Transport Licensing Authority, the Hong Kong Government adopted a one route-one airline policy, which lasted until 2001. The airline was not able to gain the scheduled routes it needed to compete effectively. The airline was disadvantaged in that Hong Kong's financial secretary back then, Sir John Bembridge, was a former Cathay Pacific chairman.[5][6][7]
Mr Stephen Miller, Dragonair's first CEO, said:
Our arrival on the scene was not hailed very enthusiastically by the then Hong Kong government...we got a lot of opposition from Cathay (Pacific).[7]
It was later discovered that Cathay Pacific was concentrating on a boom in travel elsewhere in the 1980s, and left the undeveloped mainland China market to Dragonair. Forced into accepting less-desirable routes, the young airline focused on the mainland.[7]